After the long weekend’s lacklustre turnover, we were again shown that the market is not dead and buried. 67% clearance rate on 600 auctions is better than most of the results of the previous three months. The third week in March was the last time the clearance rate was above this.
It is becoming more obvious that assessing a property accurately is a key ingredient to buying well. Three people fought out a spirited auction in McKinnon on Sunday lifting the final price over reserve. The house was well located, offering excellent attributes of good light, accommodation and entertainment areas and was very well finished. The property was marketed at the right price throughout the campaign and therefore reached its objective: selling at a good price for the vendor.
Conversely, when we see offers 15% over market value for properties and these offers are declined, we can see that some vendors are still in a state of denial regarding the market, and others are simply waiting for the ill-informed to appear.
Buyers who are borrowing money from the banks and who are reliant on a reasonable valuation must take this into account when placing offers. Even at auction, a Valuer does not have to value the property at the final selling price. This means if you are borrowing say 80% of valuation from the bank and you pay $600,000, then you are expecting to borrow $480,000 and this is no doubt what you have done your figures on. But, if the bank values the property at $550,000 then they will only lend you $440,000. Where will you get the other $40,000 from?
It pays to get a professional to assist you when buying a home. When choosing a Buyers Advocate, ask if they sell any properties, or do they accept any commission sharing arrangements with any Real Estate Agents. All we do is assist our clients to buy property.
Ian James
